Hospital mergers may harm patient care

The mergers of hospitals and healthcare systems are more likely to lead to higher costs for consumers than more efficient healthcare delivery, according to a Bloomberg opinion article.

"The disconnect between price and value has many causes, but the flurry of mergers and acquisitions in the hospital industry is making it worse," Shannon Brownlee and Vikas Saini of the Lown Institute wrote. "Hospitals command higher prices when they corner market share. They gain even more leverage when they gobble up large physician practices."

Mergers and acquisitions among hospitals and medical groups are on the rise. In the third quarter of 2013, there was a 16 percent rise in transactions in the sector and 267 new deals.

The pair noted that federal regulators are aware of that fact, citing a U.S. District Court in Idaho voiding a recent acquisition of Saltzer Medical Group by St. Luke's Health System. The judge in that case noted that while physicians may have discretion over referrals, discretion typically favors the hospital that employs the physicians. Moreover, patients rarely question their physicians' recommendations.

However, the pair believe that the feds are not acting quickly enough, and that the acquisitions have an effect on how physicians practice medicine. Meanwhile, hospitals are pushing back. The Washington Hospital Association  filed suit in state court attempting to overturn a new state law that gives state regulators greater scrutiny over hospital mergers and affiliations, the Seattle Times reported.

"As large hospitals gain financial control of physician practices, the medical profession becomes another cog in the corporate machine, and many physicians have told us they feel they must skew their medical judgment to keep their jobs," Brownlee and Saini wrote, later adding that, "if we want better care and less waste, the balance of control over what happens to patients should be in the hands of physicians, not hospitals."

To learn more:
- read the Bloomberg opinion article
- here's the Seattle Times article